I'm trying to knit this: http://www.headhuggers.org/patterns/kpatt07.htm
I have an extra loop!...I'm not sure which increase I'm supposed to be doing...i did the first one...then it wants me to do another at the end...or am I just reading it wrong...please help!

When I did it, I kept the extra stitches on the needles and used stitch markers to denote where the last short row ended. That way I knew where I should stop knitting and turn the work. It makes things a lot easier

There's also a video in the 'advanced techniques' section. You don't have to knit the wrapped yarn at the end - it still looks great without.

I have also recently started this project. It's a first for me...before now I've only ever made slippers and blankets so I'm a bit of a beginner. The pattern did not seem to be emerging for me at all. Could it be as simple as I should be using circular needles? Or am I missing something else?

No you can use straight needles with it, but because they're not flexible, you won't see the effects of the short row shaping until you pick up thoses stitches again which will be at row 30. Then it might take a couple more rows to see it.